Three Cheers for Quasi-State U.?

Eighteen months ago, this higher education system was "emerging from the pack" and gaining national recognition thanks to state support and optimistic plans for new programs and healthy growth.

Then the recession hit.

Today, administrators warily hope to return their universities to the functioning levels of 1988, yet further state cuts have forced new hit lists of academic programs, personnel and campus equipment. Even library book orders have been axed.

Sounds like life in College Park and Annapolis these days.

But this is a story about Virginia.

Times are so tough in Richmond that a July report by college and university presidents, the chancellor of the community college system and state higher education officials said that converting state schools like the venerated University of Virginia, George Mason University, the College of William and Mary and Virginia Military Institute into semi-private institutions is possible if "normal" funding is not restored by 1996.

That radical change would result in higher tuitions and would relieve certain areas of campus from restrictive state procurement laws -- all ways to generate revenue and restore deep state budget cuts.

The report suggests legislation that would allow the state's "most prestigious and financially strongest institutions" to give up public status, becoming quasi-private institutions. The Virginia academicians concluded that it may be best to allow the state's institutions to privatize through a piecemeal approach -- an engineering school at one university might go private, for example while other schools on the same campus, less able to survive primarily on tuition revenue, would remain state supported. For those that become private, the bureaucracy of state policies and procedures would evaporate, making more funding available for the schools that remain state supported.

"There would be fewer people at the trough, and the dollars would go further," said Gordon K. Davies, director of the Virginia Council of Higher Education. "We have some universities of national stature and it would be terrible to let them go mediocre. This is not a bluff."

With an almost $2.2 billion budget crisis at hand, Virginia legislators have slashed $600 million from higher education spending since 1990, halting enhancements initiated during the 1980s. To keep pace with an expected enrollment increase of 25 percent by the year 2000, educators estimate they will need $1 billion for capital improvements to classrooms, offices and administrative buildings. About $500 million is needed for operating expenses by 1994.

Tall orders for a state with empty pockets.

The idea to privatize was one of 11 options listed in the presidents' report, a 29-page document that ended with a Declaration of Independence-like signature page by state college and university presidents. Other options include: degrading quality at state institutions, reducing enrollments to match dropping state matching fund levels, tuition hikes and encouraging students to attend community colleges for the first two years of college.

The underlying theme of the report is an urgent need to change the methods by which higher education is funded, Mr. Davies said. States that in the 1980s had so many obligations placed on them by the federal government for roads, prisons and education are now so strapped that many governors and state legislatures are faced with a "worst case premise."

"Our sense is that we may be at a watershed in American education in terms of who pays for American education," Mr. Davies said. "If we don't plan for a marked change, between the distribution in responsibility of students who pay tuition and the state who pays support, we'll have wreckage by the year 2000."

Virginia's tuition increases have averaged 8 percent over the past two years, but could jump 40 percent in a worst-case scenario if requested state funding of $500 million is not granted and tuition becomes the main source of running the 39 state-supported institutions.

If partial state funding is achieved in the state's upcoming two-year budget cycle, the next planned tuition increase could be 14 to 20 percent, Mr. Davies said. This fall, it will cost an in-state student $6,663 per year in tuition, fees, room and board to attend the U of Virginia and an out-of-state student $12,873.

"I think this is happening all over the U.S.," Mr. Davies said. "But Virginia is watching it happen and perhaps trying to take that perspective more than other states."

Maryland's fiscal crisis pales when compared to the problems facing Virginia. But the tom-toms are starting to beat in Maryland higher education circles, where officials are reeling from $84 million in cuts to the University of Maryland's 1991 and 1992 operating budgets, aid to private institutions has been scaled back, and tuition hikes and surcharges are now part of each semester's welcoming mat.